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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No.______)*
Utah Resources International, Inc.
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(Name of Issuer)
Common Stock, $.10 par value per share
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(Title of Class of Securities)
917518102
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(CUSIP Number)
John Fife
President, Inter-Mountain Capital Corp.
360 East Randolph Street
Suite 2403
Chicago, Illinois 60601
312/565-1569
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(Name, Address and Telephone Number of Person Authorized
to Receive Notice and Communications)
April 5, 1996
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(Date of Event which Requires Filing of this Statement)
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If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(b)(3) or (4), check the following box./ /
Check the following box if a fee is being paid with the statement /x/. (A
fee is not required only if the reporting person: (1) has a previous statement
on file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom copies
are to be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 (the "Act") or otherwise subject to the liabilities of this section
of the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
SCHEDULE 13D
CUSIP NO. 917518102 Page of Pages
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(1) Name of Reporting Person. Inter-Mountain Capital Corp.
S.S. or I.R.S. Identification No. of Above Person. FEIN 36-4075407
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(2) Check the Appropriate Box if a Member of a Group* (a) / /
(b) / /
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(3) SEC Use Only
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(4) Source of Funds* WC
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(5) Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) / /
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(6) Citizenship or Place of Organization. Delaware
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Number of (7) Sole Voting Power. 2,500 plus an indeterminate number
Shares constituting 51%
Beneficially -----------------------------------------------------------------
Owned By (8) Shared Voting Power. 0
Each -----------------------------------------------------------------
Reporting (9) Sole Dispositive Power. 2,500 plus an indeterminate number
Person constituting 51%.
With -----------------------------------------------------------------
(10) Shared Dispositive Power. 0
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(11) Aggregate Amount Beneficially Owned by Each Reporting Person. 2,500
plus an indeterminate number constituting 51%.
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(12) Check Box if the Aggregate Amount in Row 11 Excludes Certain Shares*
/ /
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(13) Percent of Class Represented by Amount in Row (11). 51%
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(14) Type of Reporting Person* HC
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE,
AND THE SIGNATURE ATTESTATION.
Item 1. Security and Issuer.
This statement on Schedule 13D ("Schedule 13D"), relates to the Common,
$.10 par value per share stock of Utah Resources International, Inc. (the
"Issuer") (the "Stock"). The principal executive office of the Issuer is at 297
West Hilton Drive Suite #4, St. George, Utah 84770.
Item 2. Identity and Background.
This Schedule 13D is filed on behalf of Inter-Mountain Capital Corp., a
Delaware corporation, authorized to do business in Utah (the "Company"). The
Company's business address is 360 East Randolph Street, Suite 2403, Chicago,
Illinois 60601. John Fife, a United States citizen, is the President, sole
director and sole shareholder of the Company. John Fife's
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business address is 360 East Randolph Street, Suite 2403, Chicago, Illinois
60601. John Fife's present principal occupation is that of a business owner
and private investor. During the last five (5) years, neither the Company
nor John Fife has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors). During the last five (5) years, neither
the Company nor John Fife has been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and consequently,
neither has been nor is subject to a judgement, decree or final order
enjoining future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding of any violation with
respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
Pursuant to the terms of a Letter of Intent by and between the Issuer
and the Company, dated as of April 5, 1996 (the "Letter of Intent"), and
subject to the satisfaction of certain conditions and contingencies, such as,
the preparation and execution of a definitive agreement, the Company's due
diligence investigation, obtaining fairness opinions relating to the
transaction and the spin-off of MidWest Railroad Construction and Maintenance
Company ("MWRCM"), and necessary regulatory consents, the Issuer entering
into a written employment agreement with Gerry Brown, President of the
Issuer's real estate division, after spinning off MWRCM to Robert and Judith
Wolff, the prior owners of MWRCM, the Issuer has agreed to issue and the
Company has agreed to purchase a majority interest in the Issuer's Stock. At
the closing of the acquisition of Stock, which, if all contingencies and
conditions are satisfied or waived, would occur within sixty (60) days of
April 5, 1996 (the "Closing"), the Company would acquire the number of shares
of the Issuer's stock, necessary so that the Company will own at least
fifty-one percent (51%) of the Issuer's Stock then outstanding as of the
Closing. Issuer's Stock purchased from the Issuer shall be at a price equal
to Three and 35/100 Dollars ($3.35) per share (the "Purchase Price"). At the
Closing, the Company would pay the Issuer ten percent (10%) of the Purchase
Price via wire transfer, using working capital of the Company. The balance
of the purchase price would be evidenced by the Company's Installment Note
(the "Note"), in an amount equal to ninety percent (90%) of the purchase
price. The Note would bear interest at the rate equal to the mid-term
applicable federal rate published by the Internal Revenue Service, pursuant
to Section 1274(d) of the Internal Revenue Code of 1986, as amended, in
effect at the time of the Closing. The Note would be secured by a pledge of
the Stock.
Item 4. Purpose of Transaction.
(a) Acquisition by any Person of Additional Securities of the Issuer, or
the Disposition of Securities of the Issuer.
If the transactions contemplated by the Letter of Intent are
consummated, under the terms of the Letter of Intent, the Issuer has granted
the Company an option to acquire one hundred fifty thousand (150,000), or
more, additional shares of the capital stock of the Issuer at an exercise
price of Three and 35/100 Dollars ($3.35) per share, such that the Company,
under the terms of the options, would have, at all times, the right to own
fifty-one percent (51%) of the Issuer's Stock then outstanding as of the
Closing. The option to acquire this stock is exercisable for a period of ten
(10) years from the date of the Closing.
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Prior to the Company entering into the Letter of Intent with the Issuer,
John Fife entered into a Letter Agreement, by and among, John Fife, Ernest Muth
("Muth"), of 1207 East South Temple, Salt Lake City, Utah 84102 and Thomas F.
Ralphs ("Ralphs"), of 245 North Vine, Salt Lake City, Utah 84113, and Precious
Metals, Inc., a Utah corporation, dated as of March 30, 1996 (the "Letter
Agreement"), which Letter Agreement John Fife intends to assign to the Company.
Under the terms of the Letter Agreement, John Fife has the option to purchase
all, but not less than all, of the shares of stock of the Issuer held by or
beneficially owned or controlled by Muth and Ralphs (approximately 90,000
shares) at an option exercise price per share of Four Dollars ($4.00). John
Fife paid Muth and Ralphs an aggregat of Fifteen Thousand Dollars
($15,000), which amount is a non-refundable option payment to be applied to the
ultimate purchase price. On May 1, 1996, John Fife or the Company will pay Muth
and Ralphs Five Thousand Dollars ($5,000), which amount is a non-refundable
option payment to be applied to the ultimate purchase price. This option
expires within sixty (60) days of March 30, 1996 and during the option period,
John Fife was granted a proxy to vote the shares held by Muth and Ralphs.
Upon exercise of this option, Muth and Ralphs shall assign to the Company all
their rights and obligations under that certain Settlement Agreement dated
April 6, 1993 executed in connection with a lawsuit filed in the Third
District of Salt Lake County, Utah, Civil No. C-87-1632.
(b) Extraordinary Corporate Transaction, such as a Merger, Reorganization
or Liquidation, Involving the Issuer or any of its Subsidiaries.
In the event the transactions contemplated by the Letter of Intent are
consummated, then within six (6) months following the Closing, it is
contemplated that the Issuer would either (i) cause a 12,500 to 1 share
reverse split of the Issuer's shares to shareholders of record as of April 5,
1996, at a purchase price equal to Three and 35/100 Dollars ($3.35) per
share, with fractional shareholders given the option to purchase additional
shares to round up to one whole share following the reverse split; or (ii) to
make an offer to purchase all outstanding shares of the Issuer's stock from
any shareholder wishing to tender such shares (the "Tender").
(c) A Sale or Transfer of a Material Amount of the Assets of the Issuer or
any of its Subsidiaries.
As a condition to the Closing of the transactions contemplated by the
Letter of Intent, Issuer shall enter into an agreement upon terms and
conditions acceptable to the Company, with MWRCM, Robert D. Wolff and Judith
J. Wolff (Robert D. Wolff and Judith J. Wolff together are the "Wolffs"),
whereby the shares of MWRCM owned by the Issuer shall be spun off to the
Wolffs.
(d) Any Change in the Present Board of Directors or Management of the
Issuer, Including any Plans or Proposals to Change the Number or Term
of Directors or to Fill any Existing Vacancies on the Board.
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In the event the transactions contemplated by the Letter of Intent are
consummated, then when the Closing occurs the Company shall receive the written
resignations of all of the officers of the Issuer as the Company shall request
and the Board of Directors of the Issuer shall elect John Fife, President and
Chief Executive Officer of the Issuer.
(e) Any Material Change in the Present Capitalization or Dividend Policy
of the Issuer.
None at this time, although the Company reserves the right to consider such
actions.
(f) Any Other Material Change in the Issuer's Business or Corporate
Structure Including but not Limited to, if the Issuer is a Registered
Closed-end Investment Company, any Plans or Proposals to Make any
Changes in its Investment Policy for which a Vote is Required by
Section 13 of the Investment Company Act of 1940.
None at this time, although the Company reserves the right to consider such
actions.
(g) Changes in the Issuer's Charter, Bylaws or Instruments Corresponding
Thereto or Other Actions which may Impede the Acquisition of Control
of the Issuer by any Person.
During the term of the Letter of Intent, the Issuer shall not issue
any additional shares or sell any additional shares of its capital stock,
instruments convertible into shares, other than as contemplated and addressed in
Item 4 above.
(h) Causing a Class of Securities of the Issuer to be Delisted from a
National Securities Exchange or to Cease to be Authorized to be Quoted
in an Inter-dealer Quotation System of a Registered National
Securities Association.
If the transactions contemplated by the Letter of Intent are consummated,
it may cause a class of securities of the Issuer to be delisted from a national
securities exchange or cause a class of securities to cease to be authorized to
be quoted in an inter-dealer quotation system of a registered national
securities association. See the response to item 4(b).
(i) A Class of Equity Securities of the Issuer Becoming Eligible for
Termination of Registration Pursuant to Section 12(g)(4) of the Act.
If the transactions contemplated by the Letter of Intent are
consummated, it may cause a class of securities of the Issuer to be delisted
from a national securities exchange or cause a class of securities to cease
to be authorized to be quoted in an inter-dealer quotation system of a
registered national securities association, pursuant to Section 12(g)(4) of
the Act. See the response to Item 4(b).
(j) Any Action Similar to any of those Enumerated Above.
None.
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Item 5. Interest in Securities of the Issuer.
(a) See the responses to Items 3 and 4.
(b) See the response to Item 4(a).
(c) See the response to Item 4(a). John Fife acquired 2,500
shares of the Issuer's stock on January 22, 1996, from market
purchases, for the aggregate purchase price of Two Thousand Five
Hundred One Dollars ($2,501).
(d) No other person is known by the Company to have the right to receive
or the power to direct the receipt of dividends from, or the proceeds
from the sale of, such securities.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
See the responses to Items 3 and 4.
Item 7. Materials to Be Filed as Exhibits.
Exhibit 1. Letter of Intent
Exhibit 2. Letter Agreement
Signature.
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
4/15/96 /s/ John Fife
__________________________________ __________________________________
Date Signature
President
__________________________________
Name/Title
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EXHIBIT 1
VIA HAND DELIVERY
UTAH RESOURCES INTERNATIONAL, INC.
297 West Hilton Drive
Suite #4
St. George, Utah 84770
Re: Letter of Intent
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Gentlemen:
This letter will confirm the intention of Inter-Mountain Capital Corp., a
Delaware corporation qualified to do business in Utah ("PURCHASER"), to acquire
a majority interest in the shares of stock of Utah Resources International,
Inc., a Utah corporation (the "COMPANY").
By executing this letter, the parties confirm their intentions specified
herein with respect to the proposed transaction, which are intended to and shall
be legally binding and enforceable. Subject to the foregoing, it is the
intention of the parties to proceed with the proposed transaction as follows:
1. Purchaser shall acquire a majority stock interest in the Company
through its acquisition of an amount up to fifty-one percent (51%) of the shares
of the Company's $.10 par value stock (the "STOCK"), at Three and 35/100 Dollars
($3.35) per share (the "PURCHASE PRICE"). At the Closing of the acquisition of
the Stock, which shall occur within sixty (60) days of acceptance by the Company
of this letter (which shall be referred to as the "CLOSING" or the "CLOSING
DATE"), Purchaser shall pay to the Company ten percent (10%) of the Purchase
Price via wire transfer. The balance of the Purchase Price shall be evidenced
by Purchaser's Installment Note (the "NOTE"), in an amount equal to ninety
percent (90%) of the Purchase Price. The Note shall bear interest at a rate
equal to the mid-term applicable federal rate published by the Internal Revenue
Service, pursuant to Section 1274(d) of the Internal Revenue
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UTAH RESOURCES INTERNATIONAL, INC.
April 5, 1996
Page 2
Code of 1986, as amended, in effect at the time of the Closing. The
principal and interest accrued under the Note shall be due and payable August
1, 2001. The Note will be secured by a pledge of the Stock. In addition,
the Company shall issue an option to Purchaser to acquire one hundred fifty
thousand (150,000), or more, additional shares of the capital stock of the
Company at an exercise price of Three and 35/100 Dollars ($3.35) per share,
such that Purchaser under the terms of the options shall have at all times
the right to own fifty-one percent (51%) of the Stock. The option to acquire
will be exercisable for a period of ten (10) years from the date of the
Closing.
2. The parties will negotiate in good faith to enter into a definitive
agreement within thirty (30) days of the date of acceptance of this letter by
the Company, which will include customary representations and warranties,
including without limitation, with respect to the ownership of the capital stock
of the Company, the Company, its subsidiaries and their respective businesses,
assets, (including, without limitation, the property where the Company is
located), liabilities, including, without limitation, pension and profit sharing
plans and tax liabilities, and financial condition, including a representation
that the Company possesses all ownership or other unrestricted rights to all
assets used or useful to the Company, including all patents, trademarks, trade
names and other proprietary rights. The representations and warranties of both
parties to the Agreement will survive the Closing Date for a period of two (2)
years, excepting fraud and applicable tax statutes of limitation. The
definitive agreement will also include customary covenants concerning the
operation of the Company and its subsidiaries until the Closing.
3. a. Subsequent to the Closing and at the earliest possible date,
and in any event no later than six (6) months following the Closing, the
Purchaser shall cause the Company to either (i) cause a 12,500 to 1 share
reverse split of the Company's shares to shareholders of record as of the
date hereof, at Three and 35/100 dollars ($3.35) per share, with fractional
shareholders given the option to purchase additional shares to round up to
one whole share following the reverse split (the parties agree that Purchaser
may, at his option, be issued additional shares at a price per share
equivalent to that set forth in Paragraph 1 above so that after the reverse
stock split Purchaser shall own fifty-one percent (51%) of the outstanding
shares of the Company. This covenant to allow the Purchaser to maintain its
51% ownership position shall apply to any issuance of stock by the Company
until a Board of Directors is elected by vote of the shareholders after March
of 1997); or (ii) to make an offer to purchase all outstanding shares of the
Company's stock from any shareholder wishing to tender such shares (the
"TENDER"). If the Tender is undertaken by the Company, the Tender shall
provide that a shareholder must tender all of such shares in the Company and
select one of the following two (2) options:
(A) Under the first option, the Company shall make a Three and
35/100 Dollars ($3.35) offer to purchase all outstanding shares of the
Company's stock from any
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UTAH RESOURCES INTERNATIONAL, INC.
April 5, 1996
Page 3
shareholder wishing to tender all of such shareholder's shares, with
payment for the offered shares under this exercised first option, to
occur at the initial closing of the Tender;
(B) Under the second option, the Company shall make a Three and
85/100 Dollars ($3.85) offer to purchase all outstanding shares of the
Company's stock from any shareholder wishing to tender all of such
shareholder's shares, with payment for the offered shares under the
exercised second option, to occur as follows:
(I) One Dollar ($1.00) will be immediately payable to the
offering shareholder at the initial closing of the tender; and
(II) The remainder of the purchase price will be evidenced by a
promissory note issued by the Company bearing interest at the lowest
applicable federal rate in effect for short-term loans, payable
eighteen (18) months from the date of closing (the "SECOND OPTION
NOTE").
(C) The Tender and the Reverse Split, as the case may be, shall be
conditioned upon:
(i) The Company obtaining a fairness opinion from a qualified
and experienced financial advisor (investment banker, accountant,
business appraiser or other qualified person or firm), chosen by the
Company, providing that the option prices referred to above are fair
to the Company's shareholders from a financial point of view in light
of all of the circumstances surrounding this Agreement.
(ii) The Company complying with all applicable provisions of
federal and state law, including, without limitation, Section 13(e) of
the Securities and Exchange Act of 1934, and the regulations
promulgated thereunder, to the extent required.
(iii) The Company obtaining financing for the Company to complete
the Tender or the Reverse Split, as the case may be. Purchaser agrees
that such financing will not require the personal guarantee of any
existing officer or director of the Company. To secure its obligation
to purchase the shares under the Tender, the Company will set aside
land with sufficient fair market equity value to complete the Tender,
net of encumbrances, and shall reserve that land by placing deed
restrictions or other acceptable security in escrow with Zions First
National Bank or another similar financial institution.
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UTAH RESOURCES INTERNATIONAL, INC.
April 5, 1996
Page 4
(iv) The Company will have six (6) months from the date of
Closing to obtain financing and complete the Tender or the Reverse
Split, as the case may be, subject in either case to receipt of
appropriate governmental and regulatory clearances and approvals.
(v) The notice to the Company's shareholders of the Tender and
the Reverse Split, as the case may be, shall include disclosure that
the Company may subsequently elect to take steps to take the Company
private.
4. The transaction will be subject, among other things, to Purchaser's
satisfaction that the following conditions have been satisfied at or prior to
the Closing:
(a) Successfully completing, as determined by Purchaser in its sole
discretion, Purchaser's due diligence of the Company, within forty-five
(45) days following the acceptance by the Company of this letter and
approval by its Board of Directors;
(b) The parties entering into a definitive stock purchase agreement
within the next thirty (30) days following the acceptance by the Company of
this letter (the "AGREEMENT");
(c) The Company obtaining all necessary corporate approvals, court
consents (if necessary) and/or regulatory approvals or clearances,
including, but not limited to, any consents and approvals from the
Securities and Exchange Commission (provided, however, that the timing of
filing for the Tender shall not be effected by this subparagraph), and any
material consents of third parties;
(d) The Company entering into an agreement, upon terms and conditions
acceptable to Purchaser, with MidWest Railroad Construction and Maintenance
Corporation, Robert D. Wolff and Judith J. Wolff (Robert D. Wolff and
Judith J. Wolff together are the "WOLFFS"), whereby the shares of MidWest
Railroad Construction and Maintenance Corporation owned by the Company
shall be spun off to the Wolffs ("Spin Off Agreement"). The spin off shall
be conditioned upon the receipt by the Company of an opinion from a
qualified and experienced financial advisor (investment banker, accountant,
business appraiser or other qualified person or firm) chosen by the
Company, that the spin off is fair to the Company's shareholders "from a
financial point of view." Further the Spin Off Agreement shall be
conditioned upon providing appropriate tax indemnifications and acceptable
bank account and transaction reconciliations to the Company. Also,
Robert D. Wolff shall resign as President of the Company, and his
employment agreement shall terminate. The Wolffs shall covenant that they
will not, individually, collectively or through an affiliate, own shares or
other ownership interest;
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UTAH RESOURCES INTERNATIONAL, INC.
April 5, 1996
Page 5
in any entity in which Purchaser or an affiliate thereof has a five
percent (5%) ownership interest;
(e) The Company obtaining an opinion from a qualified and experienced
financial advisor (investment banker, accountant, business appraiser or
other qualified person or firm), chosen by the Company, that the
transactions contemplated by this Agreement are fair to the Company's
shareholders "from a financial point of view"; and
(f) The Company entering into an employment agreement with Gerry T.
Brown, upon terms and conditions acceptable to Purchaser.
5. The Company hereby indemnifies the Purchaser and its shareholders,
officers and directors from and against any liability to the Company's
shareholders, officers and/or directors arising out of the Purchaser's
negotiation, execution and/or consummation of this letter, the Agreement and the
transactions contemplated hereby.
6. Purchaser agrees to take all actions necessary to cause the Company to
honor the Company's obligations to indemnify its officers and directors to the
fullest extent permitted by law, including, but not limited to, the advancement
of their legal fees and costs in connection with all present and future
litigation involving them in their capacities as officers and directors of the
Company. Sufficient security for the ongoing indemnification of officers and
directors shall be provided by the Company.
7. Upon execution of this letter, it is agreed that the Purchaser and its
representatives may conduct an investigation of the Company, its subsidiaries,
and their respective businesses and shall have full access to the Company's and
its subsidiaries' personnel, records and facilities as proper due diligence may
require. Such investigation shall be conducted during normal business hours and
in a manner not to materially interfere with normal business operations. All
confidential information provided to a party pursuant to this Paragraph shall be
kept confidential by such party, all documents (and copies thereof) provided to
a party shall be promptly returned upon termination of this letter, and the
parties shall be entitled to injunctive relief to enforce the provisions of this
Paragraph 7.
8. It is understood and agreed that all public disclosures relating to
this transaction shall be through mutually agreed upon releases. The parties
agree not to make such releases until the Agreement has been executed. Neither
party shall, however, be prohibited from making any public disclosure deemed
necessary in order to fulfill disclosure obligations imposed by regulation or
law. In which event, the party making such a discloser shall inform the other
party as to the nature and timing of its intended announcement as far in advance
as is practicable.
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UTAH RESOURCES INTERNATIONAL, INC.
April 5, 1996
Page 6
9. At the Closing, the Purchaser shall receive the written resignations
of all officers of the Company as the Purchaser shall request, and the Board of
Directors of the Company shall elect John Fife, President and Chief Executive
Officer of the Company.
10. The Company, its shareholders, directors and officers covenant and
agree that, except as otherwise contemplated in this letter, until the Closing
Date, the business of the Company and its subsidiaries shall be conducted
substantially as presently operated and solely in the normal and ordinary
course; that there will be no changes in the capital structure of the Company
and its subsidiaries; it will use its best efforts to preserve intact its
present business organization and its relationship with persons having business
dealings with it; that the Company and its subsidiaries will not enter into any
material contract without the prior written consent of the Purchaser; and it
will not issue any additional shares or sell any additional shares of its
capital stock, nor instruments convertible into shares; and will consult with
Purchaser regarding all material litigation involving the Company and/or its
directors and officers. Since the date of the last financial statements of the
Company furnished or to be furnished to the Purchaser prior to Closing, there
has not been, nor will there be prior to the Closing, any distributions of any
kind to the Company's shareholders, nor any increase in compensation or benefits
to the shareholders, directors, officers and employees of the Company, other
than that contemplated in the ordinary course of business.
11. In recognition and consideration of the fact that the Purchaser will
invest substantial money, time and effort in its investigation of the Company
and in preparation and negotiation of the definitive agreement and in other
matters relating to the proposed transaction, and as a result will forego or
delay the conduct of other management activities, the Company and its principal
shareholders agree to cause all discussion and negotiations with other parties
to cease after approval of this letter agreement by the Company's Board of
Directors and further agree not, directly or indirectly, to solicit offers or
negotiate or permit their representatives to solicit offers or negotiate, from
or with any other person or entity for the sale of all or any portion of the
common stock, equity in or assets and business of the Company or any of its
subsidiaries (other than with respect to sale of less than $100,000 in the
ordinary course of business, dispositions of nonmaterial assets, and as
contemplated in this transaction).
12. Purchaser acknowledges that the Company and its directors are involved
in several court actions and that it may be necessary to prosecute others,
including a shareholders' derivative action against management of Morgan Gas &
Oil Co. for mismanagement and breach of fiduciary duty.
13. Purchaser understands that the Company's current Board of Directors
was seated and is serving pursuant to the terms and conditions of a Settlement
Agreement, which is operative until March of 1997.
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UTAH RESOURCES INTERNATIONAL, INC.
April 5, 1996
Page 7
14. Each of the parties agrees that no finder's fee or broker's commission
shall by reason of its actions be payable by any party in connections with the
transactions contemplated hereby, and no party knows of any such fee payable by
any party. Each of the parties agrees to indemnify the other party hereto from
any claim resulting from a breach by such party of this Paragraph 14.
15. The Purchaser and the Company hereby agree that, if the transaction
outlined herein is consummated, the Company will pay the respective out-of-
pocket fees and expenses incurred by the parties in connection with the
negotiation, preparation, execution and delivery of this letter, the Agreement
and any other agreements or documents contemplated thereby and their due
diligence investigation. If the transaction outlined here is not consummated,
the Company will pay to the Purchaser an amount up to $15,000 to help defray
Purchaser's actual out-of-pocket fees and expenses incurred in connection with
the transaction contemplated herein.
16. In the event this letter has not ben executed by the Company and
returned to the Purchaser by April 5, 1996, this letter shall be null and void
and of no further force and effect. This letter, if accepted by you, will
constitute a binding contract and outlines the continuing negotiations of the
parties and the parties direct their attorneys to proceed with the preparation
of the Agreement. It is understood that this letter is not intended to set
forth all of the terms of the Agreement and that the Agreement will contain
additional customary terms. This letter will be binding on the Company only
following ratification of its Chairman's execution of the letter of intent by
the Company's Board of Directors. A majority of the Board of Directors have
represented their intent to vote to ratify the letter's execution.
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UTAH RESOURCES INTERNATIONAL, INC.
April 5, 1996
Page 8
If the above correctly sets forth your understanding of the proposed
transaction, kindly so indicate by executing the enclosed copy of this letter in
the space provided below. This letter shall not be effective unless all of the
parties identified below shall have executed a counterpart of this letter in the
space provided below.
Very truly yours,
INTER-MOUNTAIN CAPITAL CORP.
By: /s/ John Fife
Its: President
AGREED and ACCEPTED this
5th day of April, 1996
UTAH RESOURCES INTERNATIONAL, INC.
By: /s/ R. Dee Ericson
Its: Chairman of the Board
<PAGE>
EXHIBIT 2
John Fife
360 East Randolph Street, Suite 2403
Chicago, Illinois 60601
March 30, 1996
Ernest Muth
1207 East South Temple
Salt Lake City, Utah 84102
Thomas F. Ralphs
245 N. Vine
Salt Lake City, UT 84113
Re: Utah Resources International, Inc. - Option to Purchase Stock
-------------------------------------------------------------
Gentlemen:
This letter serves as a binding Option to Purchase Stock Agreement when
countersigned below by you two. You hereby grant me or my wholly-owned company
an option to purchase all the shares of stock of Utah Resources International,
Inc. either of you beneficially owned or controlled as of March 29, 1996,
according to the terms and conditions set forth below. If it becomes necessary
that other persons or entities shown to be the record owners of any of the stock
being purchased under this Option need to countersign this letter agreement, you
agree to obtain their signatures.
You hereby grant me an option to purchase all of your URI Stock (but not
less than all) at any time within 60 days from the date of this Agreement, at an
option exercise price per share of $4.00. At the time of your execution of this
letter agreement, I shall deliver to you a check made payable to both of you in
the amount of $15,000, which is a non-refundable option payment, to be applied
to the ultimate purchase price of your URI Stock. If the Option has not
<PAGE>
been exercised in full within 30 days of the date of this letter or
relinquished by me, I agree to pay you an additional $5,000 non-refundable
option payment on May 1, 1996, also to be applied to the purchase price if I
exercise the Option. This Option expires if not exercised within 60 days. If
the Option is not exercised, you will keep the non-refundable option payments.
While the Option is outstanding you agree not to sell, encumber or
otherwise hypothecate your URI Stock or grant options with respect thereto
and you represent and warrant that your URI Stock is not presently
encumbered, pledged or the subject of an existing option and that you have
beneficial ownership of your URI Stock. While the Option is outstanding you
agree that I will have the right to direct the voting of your URI stock at
any shareholders meeting held during the next 60 days and to act in your
stead under the terms of that certain Settlement Agreement dated April 6,
1993, to which you are parties. In connection with my right to direct the
voting of the stock, you agree that this Option is a proxy coupled with an
interest. You agree that my exercise of the Option shall also serve as a
complete assignment from you to me of all your rights and obligations under
the Settlement Agreement, without representation or warranty from you as to
what those rights or obligations may be. You retain the right to receive any
and all dividends paid on your URI Stock prior to my exercise of the Option.
You also agree not to purchase additional shares of URI common stock during
the term of this letter agreement.
You represent and warrant that you have the legal right to enter into this
Agreement with me, and that you have obtained the authorization to enter into
this Agreement on behalf of any other record owners of your URI Stock from whom
it is necessary to obtain authorization. We all agree to keep this Option and
its terms confidential and to make no disclosures regarding its existence or
terms prior to my exercise or its expiration, unless required by law, regulation
or court order. You agree that I may assign my rights under this Option to a
company or entity wholly-owned by me. This Agreement will be enforceable
against the parties and their successor pursuant to Utah law.
Please acknowledge your acceptance of the terms and conditions of this
Agreement by executing below. I look forward to consummating this transaction
with you.
/s/ John Fife
John Fife
Accepted as of March 30, 1996:
<PAGE>
/s/ Ernest H. Muth
Ernest H. Muth
/s/ Thomas F. Ralphs
Thomas F. Ralphs
PRECIOUS METALS, INC. A Utah corporation
By /s/ Ernest H. Muth
Ernest H. Muth, President
